When it comes to trading online there are generally two routes that you can take depending on your company's size and budget. Here Parashar Mehta, Solutions Architect at The Big Group, explores the two routes.
The simple option is to treat your online shop and internal ERP (Enterprise Resource Planning) systems as separate silos of information and synch data between the two using basic methods such as CSV files. This approach, while cost effective, obviously comes with many limitations and headaches such as data integrity issues, lack of timely updates etc.
The other harder but more rewarding option is to integrate your online shop with your ERP systems using more direct and real time methods.
Not so long ago, companies were content to dip their toe in the water to test how an online eCommerce presence fitted into the business. So typically, they would set up a standalone eCommerce storefront either using in-house IT skills or buy/rent commercial products. As time has gone on, eCommerce globally has grown exponentially so the try it and see approach has given way to a clear and urgent need for businesses to adopt eCommerce as a matter of course.
More recently, seeing the benefits and popularity of eCommerce, business and IT managers have tuned into the fact that having an eCommerce system that plugs into their internal ERP and fulfilment systems is now a priority from a marketing, business and operational perspective. Indeed, such systems are now considered to provide a commercial and competitive edge over rival businesses as they can deliver efficiencies that standalone systems simply cannot in terms of quicker and seamless processing of orders, realtime stock updates, customer specific discounting etc.
So you've made the decision that you want to connect your internal ERP systems (eg. SAP, IFS etc.) to your online shop. How do you go about it? First off – it's not going to be simple or straightforward. Here are some things you need to consider and understand.
What do you want to achieve?
Involving key stakeholders such as marketing, finance, business and IT managers from the beginning to work out the goals of the integrated solution is critical. Getting each department to actively engage in this discussion will help in defining the scope and budget of the integration project as well as each department's role in it. It can also help overcome any resistance that introducing new technology can have, so that the debates as to the pros and cons are out of the way when the work actually starts!
How many systems do we have and which ones do we need to talk to each other?
Sometimes it's not just a case of plugging in the shop to the ERP system. Businesses have many internal systems that are connected in some way or share common data. So you need to explore how the online shop will fit into the existing mix and how it needs to connect to these systems. For example, established customers using the shop may be required to authenticate off an internal system. IT managers should be able to shed some light on this as well as what is required to access internal systems (VPN connections, security credentials etc).
Who is involved?
As well as key stakeholders, there are two other parties that should be involved from the early stages of the project as these will have a big impact on time and costs.
Firstly the company looking after your ERP system may need to be involved to provide consultancy on any integration work required for their software. Most ERP systems these days are open and can talk to other systems using various techniques. However, rarely is it the case that you buy a ready made module, flick a switch and it just works. So there will be some element of ERP consultancy, configuration and development cost as every business works in a different way.
The second party to involve is the team looking after development of the online shop. This could either be in-house IT staff or it could be a third party vendor or agency if it's a commercial product. The Build Vs Buy debate regarding eCommerce software is beyond the scope of this article but either way – you need to be aware of the feasibility, time, costs and hurdles involved in your project in terms of online shop development.
Getting the ERP consultant and eCommerce developer together with key stakeholders will allow you to visualise what is feasible, how long it should take, any potential integration issues, post launch support etc.
Choosing the right technology
The first obstacle for any integrated business system is how your online shop and ERP system can exchange data. Whether you've built your shop from the ground-up or purchased (or are considering purchasing) your eCommerce software – it needs to be an open system, able to exchange data in standard formats such as XML and SOAP (web services).
These days ERP systems are also more open than they used to be but once again you need to ensure that the integration capabilities exist for your ERP software to talk to other systems. Usually ERP vendors have APIs and SDKs that allow the ERP system to be extended.
ERP vendors have themselves developed their own eCommerce products that plug directly into their software. However, because eCommerce isn't their core business it would be well worth comparing the feature sets with products from dedicated eCommerce vendors and determine which best fits your needs.
By this point you may be forgiven for thinking you have to develop your own eCommerce software and integration to ERP. Fear not – for there is another way!
ERP vendors have realised that it's not in their business interest to develop eCommerce software as it can become a time/resource-consuming process that takes them away from their core offering. So instead they have started to work with established eCommerce vendors to develop integration modules to their systems. This allows the ERP company to choose best-of-breed eCommerce software to integrate with their systems without them having to worry about supporting multiple generations of software each time the new Facebook or Twitter come out.
So when you do have a chat to your ERP consultant the first thing you need to find out is which existing eCommerce products integrate into their software. If you are going down the path of purchasing your eCommerce software this will allow you to evaluate products you know will work with your ERP system. It will also enable you to tick off features that you get out of the box and plan/budget for new integration features that may well have to be added.
The devil is in the data!
Okay – so you've selected an eCommerce product or are building the integration from scratch. The most important thing about any integration is data. It can mean the difference between a good shopping experience for the customer that keeps them coming back or the failure of your online presence.
Integration at its most basic level involves mapping fields from the ERP system to the eCommerce system. The quality of the data and what you do with it is vital and the lack of it can cause you endless headaches. Payment and shipping methods also need to translate from one system to the other.
For example, if you want your shop to recognise existing customers and apply special discounts for them, that involves exchanging data about the customer and also pricing matrices specific to products and customers so it's crucial that the correct data is synchronised from the ERP system to the eCommerce system. Some customers may also have their own exclusive payment options (eg. credit account) so your eCommerce system needs to offer that option.
What you don't want to end up with is a situation where product/customer data is missing or incorrect or in the wrong field – which may in turn affect business logic in both systems and the customers' experience.
Other questions you need to explore are how often will data be synchronised between the two systems? Some systems exchange data in batches and some in real time. Do you really need a real time system or will near real time suffice?
A phased approach
You need to prioritise what integration features you deem critical, nice to have and those that could potentially fit into future phases. It is strongly recommended to do phased rollouts of ERP integrations as this allows for a more controlled deployment and allows you to focus on features that are released per phase.
Remember the customer
Whilst an eCommerce system integrated with ERP obviously provides a multitude of benefits for your business – it's your customers that must also benefit from your system. If the integration between your ERP system and web shop allows your customers to purchase your goods and services, quickly, efficiently and securely with minimum fuss then it's a step in the right direction. If your customers can engage with your web shop and feel like they are getting the same information, prices, order history and facilities just as they would through your bricks and mortar channels – then in our experience such a solution will prove to be a valuable tool keeping those customers coming back time and time again.
So what are you waiting for? Dive in!
Parashar Mehta
Solutions Architect, The Big Group